Johnson Controls launches Openblue in search for coronavirus solutions

Yahoo Finance’s Brian Sozzi and Alexis Christoforous speak with Johnson Controls President of Global Product about implementing new air filtration technology in businesses to help recover from COVID-19.

Video Transcript

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BRIAN SOZZI: As businesses around the globe search for COVID-19 solutions, on our road to recovery, air-filtration-company Johnson Controls has unveiled a new building-management system dubbed Openblue. It oversees a building's access and airflow as well as monitors social distancing and providing touchless environments. Joining us now to discuss is Johnson Controls President of Global Products Jeff Williams. Jeff, good to-- good to hear from you this morning. Good to see you.

What does this product exactly do, and can we eventually return safely to the office? A lot of concern about air circulation inside big buildings.

JEFF WILLIAMS: Yeah, let me-- Brian, let me say a couple things around Openblue. This is a our full portfolio and the capabilities of the company that include our HVAC, our fire, our security, and our digital technology. And so it's all solutions converge here.

You know, we're partnering with our customers. We're providing, you know, customized solutions. And it's an open architecture that allows, you know, third-party and other existing building systems to integrate into our system. And so we look through it as installation, service, optimization, you know, and retrofit opportunities.

But if I answer your question then directly around, you know, air quality, there's really four things that we need to, you know, certainly balance, and there's a number of trade-offs. One is ventilation. And when I say ventilation, it's around, you know, maximizing the outside fresh air. When you think of filtration, it's around, you know, that of filters, and we have MERV and HEPA filters. And then from a building automation and controls, it's around, you know, temperature and humidity and room pressurization. Then there's another additive that we talk about is UV lighting.

So, you know, in our Openblue architecture and the entire portfolio, that's just a smattering of, you know, things that we have, technologies that we have that we provide, you know, our customers.

ALEXIS CHRISTOFOROUS: Jeff, I understand you also unveiled a new temperature-check system. You know, just anecdotally when I come in and out of places, which isn't many places, but when I do, the temperature checks seem to be sort of all over the place and not super accurate. How did you guys over at Johnson Controls hone in on that?

JEFF WILLIAMS: Yeah, Alexis, a great question. So we have what we call a thermal-imaging camera, and this is, you know, the first of its kind in terms of being FDA approved. And this is recording skin temperature and alerting, you know, via our security system, which is part of the Openblue platform.

And what you'll do here, Alexis, is that, you know, this is in real time, and you can come into an entrance of a building, and there could be, you know, 20 or 30 people that are just filing in. This camera will pick up the skin temperature of all of those, you know, individuals that are coming into a building. You can have it at entrances, and you can have it throughout the building that is registering-- you know, skin temperature is one attribute of a potential, you know, illness within an individual, either an employee and/or a visitor.

BRIAN SOZZI: And, Jeff, what are you seeing in the HVAC business? I was on your earnings call last week. To me, it sounded as if the residential business is starting to outpace the commercial side in terms of growth, and maybe the business-- that business overall has bottomed in June.

JEFF WILLIAMS: Well, I would say, Brian, is that we did do our earnings here on Friday. You know, we were showing our top line down about 16%. Our margins were down about 11%, but we also talked about sequential recovery. We have seen a tremendous improvement in June, and we're seeing that momentum, you know, carry into our Q4. And we have just incredible pent-up demand when it comes to our residential and light commercial. And so, you know, we have our plants on overtime and adding shifts, you know, to certainly fulfill the requirements of our customers.

ALEXIS CHRISTOFOROUS: Which companies, Jeff, are coming to you for your services? Do you see a trend there? Because I know you are an international company. I mean, you were on the ground in Wuhan, or at least your company was, to create a makeshift hospital when COVID was raging there. So where is the most interest coming from right now?

JEFF WILLIAMS: Well, it's global. And as you know, we service, you know, the residential market, the light commercial market, you know, whether it be retail and shopping malls and a number of-- and complex buildings and hospitals, food service, et cetera. And the issue, Alexis, or the opportunity comes everywhere and globally. There isn't really one particular, you know, segment that is more dominant than the other. Everybody is looking for, you know, a number of our Openblue portfolio solutions as they begin to restart their businesses and need, you know, clean air, and they need other safety protocols within their facilities.

BRIAN SOZZI: Jeff, help an investor understand your business. There's a lot of buildings with severely antiquated-- now in hindsight because of COVID, severely antiquated HVAC systems. What does that mean for your company?

JEFF WILLIAMS: Retrofit. And I would say that, you know, we'll go in, Brian, and we'll do a-- we'll do a baseline assessment. We'll look at the age of your equipment. We'll look at its efficiency and its performance and then come in with a suite of recommendations, whether it be chillers and air handlers and filtration and other technologies that we have.

And really what we're finding is that, you know, there's two folks-- or two folds. It's either additive, right, and incremental, and/or it's a complete retrofit. But it's on that entire spectrum.

BRIAN SOZZI: And what about the fire and security side of your business?

JEFF WILLIAMS: Incredibly strong, and again, part of Openblue. When we think about, you know, new products that we're bringing to market, right, from a security standpoint, we have frictionless access. This is biometric. This is touchless, right, when you think about entering the building and, you know, where you're going. You don't have to touch the elevator button. You don't have to open the doors, right, because it's all-- it's all scanned. And that business is doing incredibly well as well as our fire business.

BRIAN SOZZI: All right, let's leave it there. Johnson Controls president of global products Jeff Williams, good luck on the road to recovery.

JEFF WILLIAMS: Thank you.